1) Which best describes the tension between central control and subsidiary initiative in
a large firm?
a. The central management must realize social capital in order to take advantages of the
complex subsidiary relationships
b. The central management’s main motivation is value for the firm, so it will only give
subsidiaries greater responsibility if they create value
c. The central management may want to give subsidiaries control and encourage
entrepreneurship and innovation, but it is difficult to distinguish between good faith
subsidiary initiative and opportunism
d. All of the answers
2) In the 1990s, the term “emerging economy/market” replaced the commonly used
term:
a. Fast growing economy/market
b. Developing economy/market
c. Undeveloped economy/market
d. Third world economy/market
3) What is a disadvantage of English being widely adopted as a global business
language?
a. An English-speaking business manager working away from his or her native culture
may miss local cultural subtleties
b. Not as many people are learning other languages
c. Firms are able to communicate more efficiently
d. English speaking countries contribute the largest share of global output
4) Civil law is derived from:
a. Greek law c. Latin law
b. Roman law d. None of these answers
5) The theory of absolute advantage is:
a. The idea that free market forces should determine how much to trade with little
government intervention
b. The economic advantage one nation enjoys that is absolutely superior to other nations
c. The idea that governments should actively protect domestic industries from imports
and vigorously promote exports
d. The belief that held that the wealth of the world was fixed and that a nation that
exported more and imported less would enjoy the net inflows of gold and silver and
thus become richer
6) Which of the NAFTA members benefited the most from this free trade agreement by
securing preferential treatment for 80% of its exports?
a. US
b. Mexico
c. Canada
d. All the countries benefited equally
7) Advocates who defend CSR would most likely argue:
a. That increased regulation and standards may force firms to innovate, and thus add to
the competitiveness of an industry
b. That regulation leads to higher costs and reduced competitiveness
c. That the amount of competition in an industry would remain unchanged, but the
industry would experience tighter profit margins as they matched new regulations
d. That competition will remain unchanged but profits will increase
8) Which of the following institutions was established following World War II to
regulate the trade between countries?
a. WTO, World Trade Organization
b. GATT, General Agreement on Tariffs and Trade
c. UN, United Nations
d. EU, European Union
9) The world’s largest democracy is:
a. United States c. India
b. China d. Western Europe
10) When Nissan invited interested buyers to pre-order the Leaf by putting down a
refundable $99 fee:
a. Nissan received no reservations, a crushing blow to the shift toward EVs
b. Nissan received 250 reservations, a lukewarm response
c. Nissan received almost 2,000 reservations, bolstering the teams confidence in the
Leaf
d. Nissan received 6,000 reservations and had to stop accepting new reservations
11) Which of the following is the law enacted in 1977 that bans bribery to foreign
officials?
a. Trust Against Bribery and Distortion Act
b. Foreign Corrupt Practices Act
c. Statute of Limitation on Foreign Direct Investment Act
d. Bribery of Foreign Public Officials Act
12) Which of the following best describes a core idea behind the informal
institution-based view regarding alliances and acquisitions?
a. It is best not to jump on the alliance and acquisition bandwagon
b. Alliances should be made with caution so that firms do not share important secrets
c. Firms often follow one another, so if competitors begin aggressively seeking targets
for alliances and acquisitions, then it is best to follow suit
d. Firms copy one another naturally as a strategy to enhance their legitimacy, so
alliances and acquisitions are a low-cost way of gaining this
13) A pure market economy characterized by the “invisible hand” of market forces is
noted by:
a. John Stuart Mill c. Aristotle
b. Adam Smith d. Amatya Zen
14) Which of the following is NOT a tangible asset?
a. Financial resources and capabilities
b. Physical resources and capabilities
c. Human resources and capabilities
d. Technological resources and capabilities
15) Turning over an organizational activity to a domestic firm is also called:
a. Captive sourcing c. Offshoring
b. Inshoring d. Outsourcing
16) Awareness, knowledge, and skills are the three phases an individual seeking cultural
intelligence must pass through.
17) Possessing intimate knowledge about the formal and informal rules governing
competition in various countries is sufficient to succeed globally.
18) Many proponents of globalization are nongovernmental organizations (NGOs).
19) Vertical FDI refers to producing the same products or offering the same services in
a host country as firms do at home.
20) Innovation-seeking firms often single out the most efficient locations featuring a
combination of economies of scale and low-cost factors.
21) Briefly explain the cause for the fall of the Bretton Woods system and identify the
modern situation.
22) Explain possible political and economic benefits of global economic integration.
23) Identify the four Cs of the human resource manager.